Sweden

Economy may blight Swedish revival

SWEDEN: Sweden's stalled offshore wind regime received a boost after a 265MW project was consented by the country's environmental court.

However, economic conditions and a lack of incentives for offshore wind mean that doubts remain as to whether the project will actually be built.

The project, at Storgrundet in the Gulf of Bothnia, 200 kilometres north of Stockholm, was approved in October. German firm WPD is developing the 53-turbine wind farm to be sited south-east of Soderhamn, 11 kilometres from the mainland.

The Swedish government refuses to consider special incentives for offshore wind turbines, which receive the same level of support as onshore wind farms despite their higher cost. Utilities Vattenfall and E.on have both postponed any further development of their respective permitted offshore projects: the flagship 640MW Kriegers Flak and the 90MW Utgrunden II.

WPD project manager Hans Ohlsson admits that it would be difficult to build the project under the current incentives regime. But the company asked for an extension on the project consent - it is valid for seven years rather than the normal five - hoping that the market situation could change in its favour during this time.

WPD stresses the opportunities that Storgrundet would create for local businesses. "We are ready for Sweden," says WPD CEO Goran Dalen. "Now the policy must provide the right conditions if we want to continue to develop renewable energy and build an entirely new industry."

In 2009, deputy prime minister Maud Olofsson indicated that offshore wind could benefit from the provisions in the EU Renewables Directive, which allow countries to meet their targets outside their own borders through "joint projects". This would enable wind farms to be built in Sweden's waters at no cost to Swedish consumers.

A leading European onshore wind operator, WPD is also one of the very few independent developers in the offshore sector and is currently developing projects in Germany, France, Finland, Denmark, Italy and Sweden. Its most recent acquisition is the 288MW Butendiek project in the German sector of the North Sea (see below).

Usually, WPD sells projects to utilities that have sufficiently strong balance sheets to take them through financial close and construction. It is currently involved in the first German project to be sited in the Baltic: EnBW's 48MW Baltic 1 wind farm, due to begin operation this year. Ohlsson expects the company to seek a partnership to take the Storgrundet project forward.

The project's location might not enjoy the high wind speeds and extreme weather conditions of North Sea wind farms, but the shallow waters, calmer weather and wave conditions will allow a bigger range of turbines and foundations to be considered. The company says that easier access for operations and maintenance will mean the turbines are available for more of the year.

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